Without a lengthy background in finance, student loans might seem scary and complex. The reality is that they aren’t nearly as difficult to understand as you might think.
By understanding some important facts about student loans, you’ll be in a much better position to save money when it comes time to pay them off. The repayment process should be much smoother for people who understand these basic facts.
You Always Have Options for Relief
Despite what some people would have you believe, there are always ways to get relief from the crushing force of student loan debt. A lot of people are struggling to make payments on student loans that were obtained from a private servicer.
If your loans were obtained through a private servicer, it’s a good idea to call the servicer and ask what relief options they have available. Discover and Wells Fargo can provide interest rate deductions or loan modifications to borrowers who’re struggling to make payments.
Alternative Federal Repayment Options Are Available
There are several alternative repayment options for student loans, and they’re provided by the federal government. It’s quite common for borrowers to get on an income-based repayment plan.
Many individuals are able to get their student loan debt capped at 10, 15 or 20 percent of leftover income. It might also be possible to stretch the repayment period to 25 years. There are different details for each plan, and it’s easy to research and find the plan that will work best for you.
Organization Is Very Important
Many individuals carry student loan debt from several different borrowers. If this describes your situation, you should make sure to create a list and keep track of the servicers that you owe money to. Credit reports make it easy to see exactly what servicers you owe money to.
Refinancing Student Loans
Individuals who have good credit might have the option of refinancing their student loans. Many companies have entered the student loan space and allowed borrowers with excellent credit to refinance their student loans.
Don’t Fall Victim to Debt Scams
There are many legitimate ways to get relief from student loan debt or refinance your loans. However, many companies are trying to take advantage of people who owe student loan debt. They create websites that look legitimate and lure unsuspecting debtors.
Auto Debiting Payments
Personal finance is easy when you can set it and forget it. If you’re making payments towards your student loans, you should set up the payments to automatically be taken out of your bank.
Get Help from the Government
A lot of people don’t realize that they can get the government to help them pay for postsecondary education. The United States Department of Education offer loans that are designed for people who wouldn’t normally be able to afford schooling.
Applications Require A FAFSA
If you want to apply for federal student loans, then you’re forced to file a FAFSA. Every federal loan is based on the needs of the borrower. The purpose of these loans is to make education available to people who can’t afford it.
Know the Difference between Loans
It’s very important to understand the fact that some student loans are provided by the Department of Education while others are provided by private banks. Loans from private banks can come with very high interest rates.
There Is a Grace Period
One of the advantages of federal student loans is that you get a grace period with them. The grace period gives graduates six to nine months before repayments begin. These are nine important things that everyone should know about student loans.